Canada’s economy grew by 0.7 per cent in January, despite lockdown measures in the face of the second wave of the COVID-19 pandemic, Statistics Canada reported Wednesday.
The national statistics agency said the economy outperformed its own expectations and was expected to register more growth in February for a tenth consecutive month where GDP
recouped lost ground.
Statistics Canada’s advance estimate for February showed the economy growing by 0.5 per cent with early indicators that the GDP also grew in March.
However, Statistics Canada noted that total economic activity was still about three per cent below the February level last year, before the pandemic began.
Manufacturing, construction and mining, quarrying, and oil and gas extraction were the main driving forces behind the economic growth in January. However, services sectors such as wholesaling, finance and insurance, real estate and rental/leasing, and professional services were also higher during the month.
Retail sales pulled back again, as in-store shopping was still restricted in much of the country, and accommodation and food services remained exceptionally soft.
Despite encouraging news in January, February and possibly March, economists warned that Canada’s economic recovery could be slowed down by restrictions imposed to fight the third wave of the pandemic.
“British Columbia already imposed a three-week ‘circuit-breaker’ lockdown, and the alarm is sounding for Ontario,” said RBC economist Claire Fan. “Still, another downturn in economic activity looks less likely given the economy was able to grow (relatively solidly) through the second wave.”
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